ECJ shows red card to football broadcasting restrictions

Summary: The European Court of Justice has ruled that restrictions in exclusive territorial broadcasting licences which prevent sale of decoder cards for use outside the broadcaster's territory infringe EU competition law. This briefing considers the impact of the Court's decision.

The ECJ has ruled that:

National law which prohibits the import, sale or use of foreign decoder cards is contrary to the fundamental freedom to provide services and cannot be justified; such decoders are not “illicit devices”, even if bought using a false name and address;

Football matches themselves are not an author’s own intellectual creation, so they are not a copyright “work”, but broadcasts of them may include copyright works such as the opening video sequence

Payment of a premium by broadcasters for absolute territorial exclusivity, and prohibitions on the use of foreign decoders, go beyond what is necessary to ensure appropriate remuneration for the holders of relevant rights. They may result in artificial price differences between different EU Member States. Partitioning the EU in that way is irreconcilable with the fundamental aim of the EU Treaty; and

A system of exclusive licences infringes EU competition law if the agreements prohibit the supply of decoder cards to TV viewers who want to watch the broadcasts outside the Member State for which the licence is granted. Licence agreements giving absolute territorial exclusivity to broadcasters in their Member State eliminate competition between broadcasters for relevant services. They divide the EU along national boundaries, have the object of restricting competition and therefore infringe competition law.

Impact

The ruling is likely to change the way in which broadcasting rights for sports events are licensed in the EU, as rights owners seek to preserve their income without infringing EU law. Rather than granting exclusive territorial licences in individual Member States, rights holders may grant EU-wide licences, with sub-licences for broadcasts in individual Member States. Obligations to delay the time of broadcast are considered by the ECJ to be more compatible with EU law than exclusive territorial restrictions.

Pub landlords may now seek to use foreign decoders, but should not assume that this will give them a long term right to show Premiership games. If broadcasting licences are restructured, broadcasters elsewhere in the EU may not have the right to show top Premiership games live. If more copyright-protected content is included in broadcasts, pub landlords may have to obtain a licence and pay a fee to show them in pubs.

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